Europeans Gain Access to Tokenised Physical Gold

Europeans Gain Access to Tokenised Physical Gold

Smart Valor (VALOR), the trading and staking platform based in Zug, Switzerland, has become the first European digital asset exchange to list the Paxos Gold token (PAXG). Each full individual PAXG is backed by an ounce of physical gold held in a Brinks storage facility.

According to Smart Valor’s official announcement, the move will provide investors with a potential safe harbour to weather the turmoil of the ongoing global stock and crypto market crisis in order to “…adjust their portfolios to the new reality of recession.”

Protect Savings

Olga Feldmeier, CEO of Smart Valor, suggested the central banks’ decision to lower their benchmark interest rate to around zero and relaunch quantitive easing will lead to further devaluation of fiat currencies which could evolve into a deep recession similar to the Great Depression of the 1930s.

As a result, Feldmeier explained “This is the time when investors are in need for a real alternative to protect their savings. Therefore, we decided to move forward with listing PAXG on Smart Valor exchange.”

Users of the exchange will be able to purchase PAXG using fiat currencies such as EURO, GBP, and the Swiss Franc and, if they wish, to trade the token against the cryptocurrencies listed on the platform.

As displayed in previous broadcast debates, the differing viewpoints of bitcoin maximalists and gold aficionados mean the two camps rarely agree. However, a middle ground where blockchain’s transaction capability is harnessed with gold’s store of value is seen by some as a compromise that is at least worth considering.

Smart Valor themselves mention that “…the truly innovative role of blockchain during this crisis might have nothing to do with Bitcoin, and rather be more on the side of tokenisation of real assets.”

Traditionally, exchange traded funds (ETFs) have served to give exposure to gold as an investment for those who were unable to purchase and store the actual physical metal but these funds contain an element of counterparty risk and are known to face potential liquidity issues in a fast-moving or restricted market.

Highlighting the difference between an ETF and PAXG, Smart Valor state that with PAXG “…a trader can send the token globally, peer-to-peer, in a few minutes to anybody anywhere who has an Ethereum wallet address. No bank account necessary.”

Smart Valor consider that such features mean “…tokenised gold can be used not only as a store of value but also as a means of payment, where it can travel completely outside of the banking system…[and]…It might be even the money the world will turn to again, should state defaults and bank runs become daily news.”